Lew Tucker, Cisco VP/CTO of Cloud Computing, discussed his company’s vision, strategy, and perspective on cloud computing in a conference call with Goldman Sachs for investors on Friday, May 31st. SDNCentral’s Market Research team was on-hand to capture highlights of their call. A PDF of Cisco’s webcast slides are available, and for our readers, we’re providing an exclusive summary of the key points below.

Cisco sees mega trends, including exponential increases in the number and variety of Internet-connected devices, the sheer amount of data being created and shared across networks each year, and the enormous growth in the number of enterprise applications that are being deployed into the cloud driving an increased need for a much more application-centric view of networking. These trends converge to create a “virtuous cycle of innovation” which accelerates the use of cloud computing technologies and software defined networking to accommodate the numbers of different devices and the movement into the cloud.

Lead in Selected XaaS Categories, where Cisco has Differentiated Application IP:

Cisco WebEx Collaboration Suite

Cisco Cloud Security for Web and Email filtering

Cloud-based management for “Lean IT” solution

Cisco’s Role in Application Development & Cloud Services

Not surprisingly, Cisco seeks to leverage its position in the industry as being a primary provider of infrastructure services; not only in terms of their Unified Computing System (UCS) but also in the core networking business, evolving with SDN and XaaS applications. Whether their customers reside within the enterprise or in the service provider space, Mr. Tucker stated that Cisco’s primary purpose today is to continue to evolve the architecture and the infrastructure for people building cloud services.

How UCS Fits Within Cisco’s Cloud Strategy

When you combine things like large memory systems and storage systems into a unified architecture, as Mr. Tucker says Cisco is doing with UCS (Unified Computing System) for example, the converged infrastructure becomes more efficient, reliable, and much easier to manage. To address customers’ concerns with scalability in the cloud, Cisco’s approach with UCS has been to focus on the software APIs that allow you to build automated systems for managing the variety of systems.

Cisco – Pursuing Open or Closed Solutions?

In discussing open vs. closed solutions, Cisco is sometimes seen as being more of a closed or vertically integrated stack. Yet a main tenet of Cisco’s Cloud strategy is the support of a variety of hypervisors as well as cloud orchestration platforms, including OpenStack. Cisco views the OpenStack community as an ideal platform for presenting the standard for Cloud Computing going forward and also in terms of advancing the state-of-the-art in Cloud Computing.

When asked which openness is more important: that at the infrastructure layer or that at the cloud management and hypervisor layer, Cisco’s CTO stated that their goal is to have a platform that is open and then make it available through multiple vendors. He acknowledged that even as customers desire more openness in industry solutions, they like to get a lot of the technology from their primary technology providers to ensure support.

Cisco’s View of SDN & OpenDaylight

Mr. Tucker seessoftware-defined networking making it possible to have software interfaces that can allow infrastructure scales to become much more dynamic and automated. On top of the primary infrastructure hardware systems that form the backbone of the network are the virtualization layer, followed by the software-defined layer and controllers that are provided by OpenDaylight. Tucker views OpenDaylight as an example of customers asking industry to standardize on the different components that make up software-defined networking. Much as they’ve done with OpenStack, Cisco is contributing technology into the OpenDaylight project, in concert with a number of companies, to come up with a best solution for customers. With that solution in place, individual vendors will then compete on the implementation.

Layer 4-7 Services & Cisco’s Cloud Strategy

Cisco’s Cloud Computing CTO sees an increasingly application-centric world; one in which the services provided through the applications, whether that be load balancing, WAN acceleration, etc., have become much more important to the quality of service requisite to the desired user experience. To deliver that experience, applications have to work in concert with the underlying technologies. With the growth in interactions between the higher-level services and virtualization, L4-7 services can be placed anywhere in the network; in fact, Mr. Tucker went on to say that a lot of what we’re seeing as the movement in Cisco’s infrastructure is the ability to have those services be deployed anywhere.

As we look further out into cloud computing, Mr. Tucker believes that we’ll see a lot of those services moving out closer to the customer, closer to the edge of the network where they can get the most performance, yet still under control of the platform. Instead of thinking of those services being delivered from a centralized data center, in fact they could be delivered from a set of data centers closer to the customer, distributed perhaps globally.

OpenStack vs. CloudStack

CloudStack is another example of open source technology with momentum; it provides competition for OpenStack and more choice for customers. Some analysts believe that, at this point in time, CloudStack is getting more traction in the market vs. OpenStack. Mr. Tucker stated that he is seeing significant deployments in CloudStack and Cisco is very supportive of it being able to run on UCS. That being said, Cisco is more directly involved in the evolution of OpenStack technology. Cisco is contributing a lot of their resources to that technology, particularly around an area of focus extending the model of cloud computing to bring out networking as a service, defining those APIs, collectively contributing code so it can become a part of OpenStack.

Cisco’s Relationship with VMware

VMware’s acquisition of Nicira, a network virtualization start-up that Cisco was also courting, has prompted many to anticipate Cisco becoming more competitive with their erstwhile strategic partner. However, in Mr. Tucker’s view not much has changed – maintaining that Cisco continues to enjoy a “very healthy” relationship with VMware while at the same time expanding their partnerships to address the different parts of the market, e.g., to serve customers who prefer to have a Microsoft solution with Hyper-V. Ensuring the capability of putting multiple systems on top of their infrastructure is part of their Open Cloud Strategy, as is looking at OpenvSwitch and OpenStack as investments in ongoing relationships with open source communities.

The Cloud Opportunity for Cisco

When queried how much of the cloud opportunity for Cisco would fall under services and how much under product revenue, Mr. Tucker opined that services will likely emerge as the as primary component of Cisco’s cloud computing strategy. As new technology comes into the market, particularly around cloud computing, there is an opportunity to help customers move from a kind of virtualized environment into Cisco’s cloud platform environment.

Roy Chua is co-Founder and Partner at SDNCentral, and a Partner at Wiretap Ventures, a management consulting firm providing trusted advice on strategy, product and go-to-market plans to Fortune 500 and high-revenue-growth startups. Roy has 20+ years of experience in enterprise SaaS, cloud computing, networking and security, and has co-founded companies in the networking, security and identity management space. In addition, Roy has held executive roles roles at early SDN companies such as XORP, and enterprise SaaS companies.

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